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$19M Settlement for Painting Stolen by Nazis

By Tanya Roth, Esq. on July 22, 2010 | Last updated on March 21, 2019

This is one legal decision that is anything but boring. A mix of great art, Nazis, and delayed compensation for a stolen family possession would interest just about anyone. A settlement of $19 million was announced on July 20, between Austria's Leopold Museum and the family of a Jewish art dealer from whom an Egon Schiele painting was stolen more than half a century ago.

According to The Wall Street Journal, the original owner of the painting was an Austrian art dealer by the name of Lea Bondi Jaray. Jaray fled Austria for England in 1939, leaving Schiele's portrait of his "redheaded mistress" Valerie Neuzil, called "Portrait of Wally," behind. After the end of the war, Allied authorities liberated the painting from Nazi clutches, and turned it over to the Austrian Federal Office for the Preservation of Historical Monuments. The painting was then sold to the Austrian National Gallery, who sold it to collector Rudolf Leopold, who set up the Leopold Museum which housed the portrait.

The Journal reports that at some point, Jaray asked Leopold to return the painting, but he refused saying it had been legally purchased. Jaray passed away in 1969. While "Wally" was on display in at the MOMA in New York in 1997, Jaray's heirs complained and Manhattan District Attorney Robert Morgenthau took control of work as "Nazi loot."

In 1999, the New York State Court of Appeals forced the city to return the work, but then the federal government seized it, saying it was stolen property. The "Portrait of Wally" has languished in U.S. Customs storage until now.

Under the settlement, the Leopold Museum has gained the right to keep the painting and the family has finally been compensated for its loss. The Journal reports that in a statement, Jaray's heirs called the deal a historic victory for their family. This may have been justice delayed, but this time, not denied.

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